The Research On The Practical Efficiency Of Stock Appreciation Rights In The Chinese Listed Companies

After reform of non-tradable shares, Chinese Listed companies have applied the stock option incentive gradually. All of us began to focus on how to choose the best stock option incentive mode.Relatively, Stock Appreciation Rights (SARs) is a newer stock option incentive mode than others mode. In2000, after the first time of stock appreciation rights has been used in SNP (Sinopec), dozens of listed companies tried to use this stock option incentive tool. How effective is SARs implementation in the companies? How to use it in practice? Is it needed to further improve? These questions are not answers until now. So this article researches all of above questions. Though analyzed and summarize all of SARs cases in our country, this paper evaluated its effectiveness comprehensively, in order to find the suitable stock appreciation rights program to china’s listed companies.Firstly, we elaborated the theory of stock option incentive, principal-agent, human capital pricing and optimal contract, combined with the inherent characteristics of the stock appreciation rights. We believed that the result of SARs was affected by these major factors: Degree of motivation, incentive model, and the choice of terms designed. In order to ensure the success of SARs implementation, the members of the Remuneration Committee of listed companies’ structure must suitable. Human capital is important object reference to determine the incentive pricing and incentive share.Then, this paper analyze the objective factors of effectiveness of the stock appreciation rights to implement from the perspective of the external environment to, including the policy environment, tax environment, the accounting environment and corporate environment. The conclusion is the external environment of stock appreciation rights to implement also determines its incentive effect, thus affecting the efficiency of the implementation level. Meanwhile, stock appreciation rights changed the interests of all stakeholders, and become an important part to measure the effectiveness of the stock appreciation rights implemented. The rational use of stock appreciation rights is inseparable from its pricing. But most of companies use different pricing models at present. Based on the classic model, Black-Scholes, combined with the weak efficiency of capital market and the character of Stock Appreciation Rights, we constructed the pricing model of Stock Appreciation Rights, and implemented it on the comparison and analysis of Stock Appreciation Rights of CMB (China Merchants Bank). We also apply it more effective that the modified Black-Scholes pricing model than the Black-Scholes model.Secondly, this paper took the full implementation of China’s listed companies of stock appreciation rights plan for the sample, compared the company’s characteristics of implement stock appreciation rights comprehensively, contrasted the different implementation of the provisions, intent to find the most suitable arrangement pattern for China’s listed companies stock appreciation rights plan. And we through the event study method to measure stock appreciation rights exercised authority and market response. The result show that the stock market overreaction for the implementation of certain stock appreciation rights. Shareholders, the company, incentive objects of stock appreciation rights demanded different interest, and the terms of the design is not quite reasonable and the effectiveness of the weak stock market, the overall insult the effectiveness the implementation low.In addition, after the discussion of the basic theory of data envelopment analysis, by using the CCR model and BCC model, horizontal and vertical comparisons of the effectiveness to implement Stock Appreciation Rights from the angel of cost-proceed. The conclusion is that the efficiency of implementation SARs in the listed companies in China is generally low efficiency. Meanwhile, take the company Guang Zhou Guo Guang as an example, comparing Stock Appreciation Rights with the other stock option incentive plan, we found the former are more effective. Stock appreciation rights incentive has played an effective role for the company’s growth performance.On the basis of the above study, this paper proposed concrete proposals and measures to further optimize the implementation of China’s stock appreciation rights plan.It is noteworthy that deeper research work is confined by some realities. Due to stock appreciation rights in the application of China’s listed companies is also still in its infancy, and the length of time or number of samples are very limited, which has become the next step work direction.